Viluan vs. Court of Appeals

Where a third-party complaint alleges the third-party defendant's direct liability to the plaintiff, judgment may be rendered against the third-party defendant without the plaintiff amending the complaint to assert a claim against him. This applies regardless of whether the third-party defendant was brought in as a principal defendant or as a third-party defendant, and regardless of whether the original defendant's liability springs from contract while the third-party defendant's arises from quasi-delict.

Francisca Viluan was the operator of a passenger bus driven by Hermenegildo Aquino, plying the route from San Fernando, La Union to Candon, Ilocos Sur. Patricio Hufana owned another passenger bus driven by Gregorio Hufana, traveling the same road. On February 16, 1958, a racing incident between the two drivers in Bangar, La Union resulted in a fiery crash that killed seven and injured thirteen passengers. The heirs of several deceased passengers and one injured passenger sued Viluan and Aquino for breach of contract of carriage. Viluan and Aquino, in turn, filed third-party complaints against the Hufanas, alleging that the accident was due to the negligence of Gregorio Hufana.

On February 16, 1958, a passenger bus owned by petitioner Francisca Viluan and driven by Hermenegildo Aquino was traveling from San Fernando, La Union to Candon, Ilocos Sur. As the bus neared the gate of the Gabaldon school building in the municipality of Bangar, another passenger bus owned by Patricio Hufana and driven by Gregorio Hufana attempted to overtake it. Instead of giving way, Aquino increased his speed and raced with the overtaking bus. Aquino lost control, causing his bus to hit a post, crash against a tree, and burst into flames. Seven persons were killed and thirteen others were injured.

Among those who perished were Timoteo Mapanao, Francisca Lacsamana, Narcisa Mendoza, and Gregorio Sibayan, whose heirs sued Viluan and Aquino for damages for breach of contract of carriage. Carolina Sabado, one of those injured, also sued Viluan and Aquino. The complaints were filed in the Court of First Instance of La Union. In their answer, Viluan and Aquino blamed respondent Gregorio Hufana for the accident and, with leave of court, filed third-party complaints against the Hufanas, alleging that the accident was due to the fault, negligence, carelessness, and imprudence of Gregorio Hufana, and that the defendants were entitled to indemnity and/or subrogation against the Hufanas in respect of the plaintiffs' claims.

After trial, the Court of First Instance found that the accident was due to the concurrent negligence of the drivers of both buses and held both drivers, together with their respective employers, jointly and severally liable for damages. The trial court awarded actual damages, moral damages, and attorney's fees to the various plaintiffs, with interest at the legal rate of six percent per annum from the date of the decision until fully paid.

Both Viluan and the Hufanas appealed to the Court of Appeals. The appellate court affirmed the finding of concurrent negligence but differed in the assessment of liabilities. It held that only Viluan, as operator of the bus, was liable for breach of contract of carriage. The driver Aquino could not be held jointly and severally liable because he was merely an employee and not a party to the contract of carriage, though he could be held liable criminally and civilly under the Revised Penal Code. The Hufanas were likewise absolved because the plaintiffs had not amended their complaints to assert claims against them as third-party defendants. The Court of Appeals also disallowed the award of moral damages to Carolina Sabado for lack of proof that the common carrier was guilty of fraud or bad faith. Viluan then appealed to the Supreme Court, contending that since the proximate cause was the concurrent negligence of both drivers, she and the Hufanas should be held equally liable to the plaintiffs.

• Joint and Several Liability: Petitioner argued that since the proximate cause of the accident was found to be the concurrent negligence of the drivers of the two buses, she and respondents Patricio and Gregorio Hufana should have been held equally liable to the plaintiffs in the damage suits.
• Third-Party Liability Without Amendment: Petitioner maintained that the fact that the respondents were not sued as principal defendants but were brought into the cases as third-party defendants should not preclude a finding of their liability.

• Third-Party Defendant Liability: Whether a third-party defendant impleaded on the ground of direct liability to the plaintiff can be held liable without the plaintiff amending the complaint to assert a claim against such third-party defendant.
• Joint and Several Liability for Concurrent Negligence: Whether the owner and driver of a common carrier and the owner and driver of another vehicle involved in concurrent negligence causing injury to passengers should be held jointly and severally liable, notwithstanding that the former's liability springs from contract and the latter's from quasi-delict.
• Moral Damages: Whether the disallowance of moral damages to injured passenger Carolina Sabado was proper.

• Third-Party Defendant Liability: Yes. Where a third-party complaint alleges the third-party defendant's direct liability to the plaintiff, no amendment of the plaintiff's complaint is necessary for judgment to be rendered against the third-party defendant. The rule requiring amendment applies only where the third-party defendant is brought in on an allegation of liability to the defendant, not where direct liability to the plaintiff is alleged.
• Joint and Several Liability for Concurrent Negligence: Yes. The owner and driver of the bus and the owner and driver of the other vehicle are jointly and severally liable for damages when concurrent negligence of both drivers causes injury to passengers, regardless of whether one party's liability springs from contract and the other's from quasi-delict.
• Moral Damages: Yes, the disallowance was proper. Moral damages were correctly disallowed for lack of proof that the common carrier was guilty of fraud or bad faith in the performance of her obligation.

• Third-Party Defendant Liability: The Court of Appeals' ruling was based on Section 5 of Rule 12 of the former Rules of Court, adopted from Rule 14-a of the Federal Rules of Civil Procedure. While that provision has been held to preclude judgment against a third-party defendant where the plaintiff has not amended the complaint, this rule applies only where the third-party defendant is brought in on an allegation of liability to the defendants. Where the third-party defendant is impleaded on the ground of direct liability to the plaintiff, no amendment is necessary. In this case, the third-party complaints charged respondents with direct liability to the plaintiffs, alleging that the accident was due to the fault, negligence, carelessness, and imprudence of Gregorio Hufana. As Chief Justice Moran explained, since the liability of the third-party defendant is already asserted in the third-party complaint, amendment is merely a matter of form, and insisting on it would not be in keeping with the liberal spirit of the Rules of Court. The Court relied on Atlantic Coast Line R. Co. vs. United States Fidelity & Guaranty Co., which clarified that Rule 14 covers two distinct subjects: the addition of parties defendant to the main cause of action, and the bringing in of a third party for a defendant's remedy over. Where the third-party complaint alleges facts showing direct liability to the plaintiff, no amendment is necessary or required.
• Joint and Several Liability for Concurrent Negligence: It should make no difference that Viluan's liability springs from contract while the Hufanas' arises from quasi-delict. As early as 1913, in Gutierrez vs. Gutierrez, 56 Phil. 177, the Court ruled that in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. Some members of the Court viewed the liability as arising from quasi-delict. The Court also cited Paulan vs. Sarabia, G.R. No. L-10542, July 31, 1958, in support.
• Moral Damages: The disallowance of moral damages in the amount of P1,000.00 to Carolina Sabado was correct because there was no showing that the common carrier was guilty of fraud or bad faith in the performance of her obligation. The Court affirmed this portion of the Court of Appeals' decision.

• Direct Liability of Third-Party Defendant — Where a third-party complaint alleges facts showing the third party's direct liability to the plaintiff on the claim set out in the plaintiff's complaint, no amendment of the complaint is necessary or required for judgment to be rendered against the third-party defendant. The rule requiring amendment (Section 5, Rule 12 of the former Rules of Court) applies only where the third-party defendant is brought in on an allegation of liability to the defendant — i.e., for indemnity or reimbursement — not where direct liability to the plaintiff is alleged. The distinction traces to the two subjects covered by Rule 14 of the Federal Rules of Civil Procedure: (1) the addition of parties defendant to the main cause of action, and (2) the bringing in of a third party for a defendant's remedy over. Amendment is required only for the second subject.

• Joint and Several Liability for Concurrent Negligence in Vehicular Accidents — In case of injury to a passenger due to the concurrent negligence of the driver of the bus on which the passenger was riding and the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. This holds true regardless of whether one party's liability springs from contract of carriage and the other's from quasi-delict. Established as early as 1913 in Gutierrez vs. Gutierrez, 56 Phil. 177.

• "The rule does not apply where a third-party defendant is impleaded on the ground of direct liability to the plaintiffs, in which case no amendment of the plaintiff's complaint is necessary." — This passage articulates the ratio decidendi on the third-party complaint issue, distinguishing between impleader for indemnity and impleader for direct liability.

• "It should make no difference therefore whether the respondents were brought in as principal defendants or as third-party defendants." — This sentence crystallizes the Court's holding that the procedural posture of impleader does not affect substantive liability where direct liability to the plaintiff is alleged.

• "Nor should it make any difference that the liability of petitioner springs from contract while that of respondents arises from quasi-delict." — This passage establishes that the source of liability — contract versus quasi-delict — does not preclude joint and several liability among parties whose concurrent negligence caused the same injury.

• Gutierrez vs. Gutierrez, 56 Phil. 177 (1913) — Controlling precedent establishing that in case of injury to a passenger due to the negligence of the driver of the bus on which he was riding and of the driver of another vehicle, the drivers as well as the owners of the two vehicles are jointly and severally liable for damages. Followed and applied in this case.
• Atlantic Coast Line R. Co. vs. United States Fidelity & Guaranty Co., 52 F. Supp. 177 (1943) — U.S. federal decision relied upon to explain that Rule 14 covers two distinct subjects: addition of parties defendant to the main cause of action, and bringing in of a third party for a defendant's remedy over. Where the third party is brought in as directly liable to the plaintiff, no amendment is necessary. Followed.
• Paulan vs. Sarabia, G.R. No. L-10542, July 31, 1958 — Cited in a footnote as additional support for the Gutierrez doctrine on joint and several liability for concurrent negligence.
• Aguas vs. Vargas, CA-G.R. No. 27161-R, Jan. 22, 1963 — Cited by the Court of Appeals for the proposition that the driver may be held liable criminally and civilly under the Revised Penal Code but not in a civil suit for damages predicated upon breach of contract.

• Section 5, Rule 12 of the former Rules of Court — Provided that the plaintiff may amend his pleadings to assert against the third-party defendant any claim which the plaintiff might have asserted against the third-party defendant had he been joined originally as a defendant. The Court held this provision applies only where the third-party defendant is brought in on an allegation of liability to the defendants, not where direct liability to the plaintiff is alleged.
• Articles 100 and 103, Revised Penal Code — Cited by the Court of Appeals regarding the driver's potential criminal and civil liability, though not in a civil suit for breach of contract. Article 100 provides civil liability arising from criminal liability; Article 103 provides the subsidiary liability of innkeepers, teachers, and employers.

Bengzon, C.J., Bautista Angelo, Concepcion, Dizon, Makalintal, Zaldivar, and Sanchez, JJ., concurred. No separate concurring opinions were noted.

No dissenting opinions were rendered. Reyes, J.B.L., and Barrera, JJ., took no part.